The latest Fossil Fuel Divestment Scorecard – a tool published annually to assist Philippine banks and their stakeholders in evaluating how they and their peers are faring in assisting the Philippines’ energy transition – is out! This year’s scorecard reveals that in the years since the Renewable Energy Law was passed, renewables received only about half of the financing that were channeled into coal and gas…but key developments like the coal moratorium won by communities and civic movements in 2020 are signaling potential shifts in trends.

Report Highlights

• Over the last 14 years, total financing for renewable energy is only half the amount banks poured into fossil fuels. For every dollar that goes into coal and gas, less than 48 cents go to renewables.
• From 2009 to 2023, total fossil fuel financing is twice that of renewables. But for 2023, RE financing is thrice the amount of fossil fuels for that year.
• China Bank, BDO, Asia United Bank (AUB), and Bank of the Philippine Islands (BPI) earned the top four spots in this year’s Divestment Scorecard.
• BPI and BDO led renewable energy financing but remained the biggest funders of coal and fossil gas, respectively.

With a call for climate emergency in the Philippines, clean energy think-tank Center for Energy, Ecology, and Development (CEED), launched the latest 2024 Fossil Fuel Divestment Scorecard, which highlights how the continued financing for fossil fuels erodes the benefits of Philippine banks’ investments for renewable energy.

In the newest edition of the Divestment Scorecard, renewable energy financing of banks is accounted for to accurately assess the contributions – or lack thereof – of Philippine financial institutions to the country’s power transition towards meeting its commitments under the Paris Agreement.

Chinabank, Banco de Oro (BDO), Asia United Bank (AUB), and Bank of the Philippine Island (BPI) earned the top four spots in this year’s Divestment Scorecard. China Bank and AUB’s massive gas financing from 2009 to 2020, and their lack of fossil fuel phaseout plans and sustainability policies earned them the high spots in the 2024 Scorecard.

Banks with no notable commitment to divest from fossil fuel financing include AUB, Bank of Commerce, Chinabank, East West Bank, Metrobank, Philippine Bank of Communications (PBCOM), Philippine National Bank (PNB), and Unionbank (UB).

“Through their inaction, these banks send out signals that they fail to acknowledge the urgency of ending fossil fuel proliferation. Philippine banks must respond to the crisis facing humanity–one that especially places all Filipinos vulnerable to super typhoons, unprecedented flash floods, and exorbitant electricity prices,” said Atty. Avril de Torres, Deputy Executive Director of Center for Energy, Ecology, and Development (CEED).

BDO is the biggest fossil gas financier, despite only starting financing gas in 2021, followed by China Bank, PNB, and BPI. Despite the increasing transition, legal, and stranding risks in the fossil gas industry, domestic banks are following the steps of international banks in funding the gas expansion in the country, like the San Miguel Corp.’s Excellent Energy Resources, Inc’s gas project in Batangas.

Another notable finding of the report is that from 2009 to 2023, total renewables financing is twice that of fossil fuels. For 2023, RE is thrice the amount of fossil fuels for that year. However, the leading financiers for renewable energy, BPI, and BDO, are also the biggest funders of coal and gas, respectively.

“With the Philippines as a signatory of the pledge to triple global renewable energy capacity, banks must take this as a signal to increase their commitment to renewable energy and at the same time, give a clear and accelerated path for the phasing out of fossil fuels from their financing portfolio. As it is now imperative to transition to clean energy, so must our banks and so are their clients,” added de Torres.

Banks are urged to immediately come up and implement clear policies and timelines to divest from existing exposure and to prohibit financing of new fossil fuel facilities through loopholes in their policies. De Torres also warned about banks’ continued gas financing, saying “No bank has adopted any face out or divestment policy when it comes to fossil gas and LNG. For some, they even perceive gas as a sustainable or green investment, which can lead us to miss our climate targets,” added de Torres.

The report also warns that the continued financing for coal and gas expansion after the coal moratorium risks crowding out renewable energy. The report cites, “From 2021 to 2023, domestic banks still funneled USD 1.3 billion to coal and USD 1.2 billion to gas. For every dollar spent on fossil fuels, less than 48 US cents were spent on renewable energy.”

Bishop Gerry Alminaza of the Catholic Bishops Conference of the Philippines National Laudato Si Program and Lead Convenor of Withdraw from Coal – End Fossil Fuels (WFC – EFF), also reminded the banks of the Catholic Church’s plan to divest from banks that do not commit to stop funding coal and fossil gas by 2025.

“We all have a responsibility to protect our Common Home, including banks. As financiers of fossil fuel projects and companies, banks play a very crucial role in steering companies to transition to renewable energy. While banks have legal obligations to their clients, they are also morally obligated to respond to the climate emergency. The results of the scorecard show that Philippine banks are still slow in responding to the urgent climate crisis,” said Bishop Gerry Alminaza of the Catholic Bishops Conference of the Philippines National Laudato Si Program and Lead Convenor of Withdraw from Coal – End Fossil Fuels (WFC – EFF).

De Torres cited the report’s recommendations calling for banks to make public pronouncements that they will no longer fund coal and fossil gas projects and to close loopholes that allow further financing via bonds or underwriting.

“The Philippines has more than enough potential to fully transition to renewables in the next two decades, in a manner compatible with the 1.5°C climate goal. Philippine banks are at a crossroads: they can continue to support fossil fuels and drive more catastrophic climate change than what Filipinos already suffer, or ambitiously transition to a finance portfolio that prioritizes renewables,” added De Torres.